Marcus & Millichap — Third Quarter 2026 Earnings Summary

Financial Performance

• Total revenue increased 7.5% year-over-year to $208.4 million for the third quarter of 2026, compared to $193.9 million in the same period in 2025.
• For the nine months ended September 30, 2026, total revenue increased 14.0% to $582.8 million, compared to $511.2 million in the prior year period.
• Brokerage commissions rose 7.4% to $174.1 million in Q3 2026 (vs. $162.2 million in Q3 2025) and 12.2% to $479.2 million for the nine months (vs. $427.2 million).
• Financing fees increased 2.6% to $27.0 million in Q3 2026 (vs. $26.3 million) and 19.0% to $84.1 million for the nine months (vs. $70.7 million).
• Pre-tax income increased to $2.6 million in Q3 2026 from $1.5 million in Q3 2025; for the nine months, pre-tax income was $6.7 million compared to a pre-tax loss of $16.2 million.
• Net income was $1.0 million ($0.03 per diluted share) for Q3 2026, compared to $0.2 million ($0.01 per diluted share) in Q3 2025; for the nine months, net income was $1.8 million ($0.05 per diluted share) compared to a net loss of $15.2 million ($0.39 per diluted share).
• Adjusted EBITDA increased to $8.2 million in Q3 2026 from $6.9 million in Q3 2025; for the nine months, Adjusted EBITDA was $23.3 million compared to a loss of $0.4 million.
• Total operating expenses were $209.3 million in Q3 2026 compared to $196.3 million in Q3 2025.
• Cost of services as a percentage of total revenue increased to 64.0% in Q3 2026 from 62.4% in the prior year period (based on nine-month data comparison).
• Total sales volume was approximately $13.8 billion for the three months ended September 30, 2026, and $40.0 billion for the nine months ended September 30, 2026.

Guidance and Future Outlook

• Management expects near-term challenges, including interest rate volatility and wider bid/ask spreads, to extend through 2026.
• The Company anticipates increased sales activity in 2027 driven by maturing loans, postponed transactions, price adjustments over the past three years, and lenders' ability to dispose of underperforming assets.
• Long-term growth is expected to be driven by platform improvements, talent acquisition, and expansion of revenue lines.
• The Company plans to leverage its strong balance sheet to pursue strategic acquisitions in 2027 and beyond.
• Key factors influencing the business through the remainder of 2026 include volatility in transactional activity, interest rate uncertainty, potential inflation, risks of recession, and geopolitical policy changes.

Business Segments and Product Lines

• Private Client Market brokerage revenue increased 3.6% to $106.0 million in Q3 2026 (vs. $102.3 million) and 9.8% to $300.3 million for the nine months (vs. $273.5 million).
• Middle Market and Larger Transaction Market brokerage revenue increased 18.1% to $62.0 million in Q3 2026 (vs. $52.5 million) and 18.9% to $161.3 million for the nine months (vs. $135.6 million).
• Total brokerage sales volume increased 12.6% in Q3 2026, driven by a nine basis point decrease in average commission rates partially offset by higher volume.
• Financing fees growth was driven by a five basis point increase in average fee rates and a 0.7% increase in total financing volume in Q3 2026.
• As of September 30, 2026, the Company employed 1,670 investment sales and financing professionals, compared to 1,669 at the end of the same period in 2025.

Market and Competitive Landscape

• The Private Client Market accounts for over 80% of all U.S. commercial property transactions and over 60% of the commission pool.
• The top 10 brokerage firms, led by Marcus & Millichap, held an estimated 18% share of the Private Client Market by transaction count in 2025.
• The market is characterized by fragmentation, which the Company views as a long-term growth opportunity for consolidation.
• The Company noted that bid-ask spreads widened following an 80 basis point increase in the 10-year Treasury yield during the quarter.

Risks and Challenges

• Risks include potentially volatile cost of debt capital, interest rate uncertainty, and the potential for rising inflation.
• Wider bid/ask spreads between buyers and sellers may impact transaction velocity.
• Risks of a potential recession and its unfavorable impact on commercial real estate space demand.
• Potential impacts from U.S. administration policy changes regarding tariffs, immigration, and geopolitics.
• Increases in operating expenses driven by labor costs, insurance, taxes, and construction materials.
• Global geopolitical uncertainty may cause investors to refrain from transacting.
• Risks related to litigation, cybersecurity, technology failures, and the ability to successfully integrate acquisitions.

Management Commentary and Tone

• Hessam Nadji, President and CEO, stated the Company delivered revenue growth and improved financial results despite rising interest rates and pressure on real estate valuations.
• Management noted that Private Client activity grew at a more moderate pace due to widened bid-ask spreads, while increased penetration of the middle market and larger transactions drove stronger revenue growth.
• The tone regarding the near-term outlook is described as "somewhat tempered" due to interest rate volatility, but confidence remains in the long-term return to growth.
• Management emphasized a focus on platform improvements, talent acquisition, and supporting the sales force.

Other Key Points

• On July 31, 2026, the Board declared a semi-annual regular dividend of $0.25 per share, paid on October 6, 2026.
• During the nine months ended September 30, 2026, the Company repurchased 912,957 shares at an average price of $26.22 for a total of $23.9 million.
• Since August 2022, the Company has repurchased and retired 3,987,494 shares at an average price of $30.06 per share for a total of $119.9 million.
• As of November 3, 2026, approximately $90.1 million remained available for share repurchases under the existing program.
• The Company closed 8,818 transactions in 2025 with a sales volume of $50.8 billion.
• The Company operates in 80 offices with 1,808 investment sales and financing professionals as of December 31, 2025.